The Federal Government’s proposed changes to the governance of superannuation funds will leave millions of workers with less to retire on according to the peak union body in NSW.
Unions NSW is calling on the Senate to block the ‘ideological attack’ on the retirement incomes of hardworking Australians and ensure our high-performing industry superannuation system is protected.
“Unions support a strong superannuation system so working Australians can provide themselves with a retirement income that is sufficient to meet their needs. We believe the current model of equal representation is the best such system,” Unions NSW Secretary Mark Lennon said.
“This is an assault on a model that has been categorically proven to deliver superior returns to workers for the past three decades.”
Myriad studies have shown the overall superiority of industry super funds compared to retail funds in terms of costs and returns. A recent independent report found the industry funds’ trustee governance structure is the model most likely to maximise retirement incomes.
The McKell Institute report: The Success of Representative Governance on Superannuation Boards draws on 25 years of data and concludes there is no evidence that mandating independent directors on not-for-profit superannuation funds would improve fund performance.
Unions fear placing so called ‘independent’ directors, most likely from the business sector on to super industry boards would tip the balance from members.
“The trustee governance structure, which shares board positions equally between employer and employee representatives, has been proven as the most effective model in Australian superannuation. It ensures decisions are made in the best interests of super fund members and has seen industry super funds consistently outperform retail super funds by around two per cent. And that’s exactly why the big banks and the Coalition hate it,” Mr Lennon said.
“The Turnbull Government is so obsessed with tearing into unions, that they are even willing to risk the retirement savings of millions of Australian workers.
“While there is always room for reform across the superannuation sector, this is one area that is actually delivering and seems to be a solution in search of a problem.
“This is a classic example of cutting off your nose to spite your face and we are calling on the Senate to block the Government’s fixation with fixing successful not-for-profit super funds and instead focus on tackling governance problems in other parts of the finance sector,” Mr Lennon said.
“More needs to be done to investigate the scandals plaguing the finance sector including the lack of governance and control in regards to financial advice and the lack of transparency with trailing commissions, charges and fees. We should be calling for a Royal Commission into the banks and their relentless undermining of workers retirement incomes to provide already out of control financial institutions with even more cash.
“While Unions NSW strongly supports good governance in super we don’t support a one size fits all approach that risks diluting rather than strengthening the super system and enriching the big banks rather than the hard working people whose futures depend on it .”
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